Alcoa, Inc. (NYSE: AA), a world leader in the production of aluminum, alumina and aluminum products, is expected to release its fiscal first-quarter earnings after the market close on Monday, April 11, 2011. In the previous two quarters AA’s reported earnings per share have exceeded analysts’ consensus estimate by margins in the range of 10.50 percent to 80 percent.
AA is the world’s largest miner of bauxite and refiner of alumina. In addition to inventing the modern-day aluminum industry, Alcoa innovation has been behind major milestones in the aerospace, automotive, packaging, building and construction, commercial transportation, consumer electronics and industrial markets over the past 120 years.
The company reported fourth quarter 2010 income from continuing operations of $258 million, or $0.24 per share, the company’s highest quarterly income since the economic downturn and $197 million higher than the third quarter of 2010. Revenue for the fourth quarter was $5.7 billion, up 7 percent compared to the third quarter. The increase was driven by an improvement in realized pricing for both alumina (9 percent) and aluminum (11 percent) as well as continued strengthening in most end markets.
For the year 2010, revenue was $21 billion, compared to $18.4 billion in 2009. Income from continuing operations was $262 million, $0.25 per share, compared with a loss of $985 million, $1.06 per share. For both years, income from continuing operations were effected by special items resulting in a negative impact of $297 million, or $0.29 per share, in 2010 and $300 million, $0.32 per share, in 2009. Full-year 2010 net income was $254 million, $0.24 per share, compared to a net loss of $1.15 billion, minus $1.23 per share, in 2009. Cash from operations in 2010 was $2.3 billion, compared to $1.4 billion in 2009. Alcoa generated $1.2 billion in free cash flow in 2010, up $1.5 billion over 2009. The company’s debt to capital ratio was reduced significantly in 2010, driven by a $654 million net reduction in debt and a $1.6 billion increase in equity.
During the quarter, Alcoa became a minority investor in Electronic Recyclers International (ERI), the largest U.S. recycler of electronics waste. On March 3, 2011, Alcoa finalized a deal with ORKLA ASA to acquire full ownership of the technology associated with the carbothermic aluminum production process, previously jointly owned by the companies. On March 9, 2011, it completed the acquisition of the aerospace fastener business of TransDigm Group Inc., a global designer, producer and supplier of highly engineered aircraft components for $240 million and is expected to be earnings and cash flow accretive in the first year.
The Board of Directors declared a quarterly common stock dividend of 3 cents per share payable February 25, 2011 to shareholders of record on February 4, 2011 and a quarterly dividend of 93.75 cents per share on Alcoa’s $3.75 cumulative preferred stock payable April 1, 2011 to shareholders of record on March 11, 2011.
The consensus estimate from analysts is EPS of $0.27 for the first quarter of 2011 compared to EPS of $0.10 in the same period last year. The average estimate for the revenue for the quarter is $6.29 billion, compared to the sales for $4.89 billion a year earlier. In the last 52 weeks, the stock has been trading in the range of $9.81 to $17.68. The stock closed near the 52 week high at $17.24 on March 28, 2011.
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